Pay Services Show Promise as Ad Blockers, Accenture Predicts
A portent for the near future: 14- to 17-year-olds appear the most willing to avoid ads through paid subscriptions.
Amazon today broke out Prime Video as a monthly subscription service.
Some 45 million Americans used ad blockers in 2015, essentially neutralizing about $22 billion in digital advertising, according to a study released earlier this year by PageFair and Adobe. Ad blocker downloads are growing at a 50% clip in the U.S. and at 35% in Europe, where close to 80 million people are saying “get lost” to marketers butting in on their quality content. No matter how much brand advertisers and their agencies despise ad blockers, this much is clear: People despise digital advertising much, much more.
Accenture today released a portion of its 2016 “Digital Consumer Survey,” in which it asked 1,000 consumers in each of 28 countries this question: Forgetting about ad blockers for a second, how willing are you to pay for ad-free content? Seven out of 10 said that frequent ad interruptions have made them more apt to spend on subscription for such as The New York Times or Amazon Prime, which today moved to extend its reach as a $8.99 a month service.
“We chose to call attention to this finding in our study because the numbers are pretty compelling,” says Gavin Mann, managing director of Accenture's global broadcast industry practice. “People are aware of free ad blockers and yet there is great potential there for paid subscription services.”
The segment of the population most eager to part with cash to avoid ads (most likely because it's their parents' cash) is 14- to 17-year-olds. Fifity-six percent of this segment said they planned to join subscription services in the coming 12 months. This, interestingly, was also the group most aware of ad blockers. Seventy-three percent said they were aware of the tool, compared to 66% in the 25-34 segment and 49% of those 55 and older.
“I think that younger people are more used to the idea that they may have to pay for content. They're not as annoyed by ads on TV as older people, for instance, because they're not watching it as much,” says Optimal.com CEO Rob Leathern, offering a preview from a study underway at his company. “Older people find TV advertising more annoying than anyone.”
Leathern and Optimal offer a paid service not considered by Accenture in its study. It's just been launched this month. Having tested nearly every free ad blocker and on the market, Optimal helps its members choose the ones that will work best for them and suck the least bandwidth from their mobile devices. At the same time, however, Optimal offers a response to advertisers and agencies who brand blockers as freeloaders. It charges $5.99 a month, keeps 30% of that, and gives the rest to website publishers. Revenue shares are parsed out based on U.S. traffic data, but members can vote larger shares for their favorite sites.
Ad blocking is a growth business and Leathern, who hails from the ad-tech industry, feels that publishers and advertisers have to develop more creative solutions in delivering their content. “It's not even a big problem on mobile yet. According to our own data, fewer than 5 percent of ads on phones are blocked, compared to 25 to 30 percent on desktop,” he says.
The Accenture survey indicates an 11% rise this year in the number of people who watch TV while also engaging in social media activities unrelated to the TV program they're watching. That gives credence to the notion of self-ad blocking via attention diversion to another channel. But the study portends growth for ad blockers, as well. Four out of 10 of the 28,000 citizens of the world polled by Accenture said they were not aware of the existence of ad blockers. They became aware upon being asked the question, however, and will no doubt be sharing the news with family and friends.